BASF’s business continued to develop favorably in the first quarter of 2010. In conjunction with the recovery of the economy and some restocking of inventories by customers, demand has risen strongly in almost all divisions. At the same time, some chemical products were in short supply. Thanks to these improvements in the market environment, sales increased by 26% to €15.5 billion.
Income from operations before special items rose by 98% to €1.95 billion, primarily as a result of higher capacity utilization. Earnings improved significantly in almost all divisions. Measures to reduce costs and increase efficiency, as well as synergies from the Ciba integration, also contributed to improved earnings. Sales and earnings increased further compared with the fourth quarter of 2009.
“We have thus almost achieved the level of the very good quarters before the crisis," said Jürgen Hambrecht, chairman of the board of executive directors, BASF SE. "Our industry business grew substantially thanks to renewed demand from almost all customer industries. Regionally, we saw high demand in Asia and South America. North America is also slowly recovering. Europe is bringing up the rear.”
In the performance products segment, demand also improved considerably in all divisions. The segment posted a clear increase in sales in the first quarter 2010, which will be the final time that the inclusion of the Ciba businesses that have now been integrated will have this effect. The main reasons for the significantly improved earnings were increased volumes and the successful realization of synergies from the Ciba integration.
BASF’s chairman overall sees the further development of 2010 positively. However, he points out that “the recovery remains shaky.” Risks result mainly from the continuing financial and debt crisis, which is intensifying in some areas, the winding down of national stimulus programs, volatile raw materials markets, excess capacities, growing geopolitical tensions, and protectionism.
For the full first quarter financials from BASF, see the report here.